Let Free Market Reign

August 14, 1986|The Morning Call

To the Editor:

When I drive around our area, gasoline at 70 cents per gallon or less stands out. These prices are an excellent example of how our economy can work when competitive forces are allowed to operate without government interference.

One of the most significant moves President Reagan made was to decontrol gasoline prices. This was done over the howls of the national liberal and socialist planners. I can remember reading horrible predictions of gasoline soaring to $2-$3 per gallon and calls for the nationalization of the oil and energy sectors of our economy.

Reagan's move contrasts with President Carter's reaction of rationing gasoline from bureaucratic Washington to all parts of the country. This produced lines in the eastern United States and California with surpluses in middle America. The price still zoomed up and lines continued to increase as the bureaucrats tried to decide who should get the gasoline. Upon decontrol, prices went up but at a slower pace as supplies evened out in a free economy in which each dealer was free to ship to that area that needed it most (had highest prices). The average citizen started conserving and demand dropped.

While prices were high, greater amounts of oil were found and production went into orbit with new oil fields and sources of production being found almost weekly. This increased supply and decreased demand and lack of government control forced prices to start down and continue to decrease to today's prices.

This same scenario has been repeated in recent years with many items such as sugar and coffee. Each time the liberals yell and scream and do special reports on television as prices on some product in short supply go up, but nothing is said as the prices decline.

The cause of high prices is when government steps in and attempts to regulate. This causes shortages and destroys competition, which alone can bring down prices. Regulation prevents the free market from making the necessary adjustments to lower prices.

Now is the time for Congress to decontrol natural gas prices so that we can allow the free market to solve the problem of the continued over-pricing of natural gas and, in turn, energy in general.

Keep the government out of the free market in this field and other fields such as farming and you can truly have the greatest good for the greatest number of Americans.